FACTBOX-Hungarian PM unveils economic plan

BUDAPEST, June 8 (BestGrowthStock) – Following are details of an
economic “action plan” announced by new Hungarian Prime Minister
Viktor Orban in Parliament on Monday:

TAX MEASURES

*Raising taxation on banks, insurers and leasing companies
to generate 200 billion forints ($1.02 billion) for the state
this year instead of 13 billion forints earlier planned for
2010.

The government plans talks with financial institutions about
the base of the higher tax which should stay in force for 3
years and would be phased out gradually.

*Introducing a flat income tax over a period of 2 years

Personal income tax would be streamlined to one rate and cut
to 16 percent, as well as lowering the gross income base on
which taxation is charged.

Currently there are two tax rates — one of 17 percent for
annual income up to 5 million forints, and one of 32 percent for
incomes above that amount.

The previous government had passed a law raising the
threshold for the lower 17 percent rate to an annual income of
15 million forints.

* Phasing out tax credits for low earners over 2 yrs

* Cutting corporate tax to 10 pct from 19 pct for small and
medium-size companies.

* Eliminating 10 “minor taxes” on small- and medium-size
companies, simplifying administrative procedures for companies

SPENDING MEASURES

*Freezing certain expenditures in budget institutions to
save 120 billion forints.

*Cut the total wage cost of companies owned by the state by
15 percent, to save 48 billion forints.

*Introduction of a 2 million forints monthly gross wage
ceiling in the public sector. Measure would also affect the
National Bank of Hungary.

REGULATION MEASURES

*Ban on foreign currency (Read more about trading foreign currency. mortgage lending.

*Freezing public utility prices, talks with the services
companies on pricing.

*Extending a ban on the eviction of borrowers who have
defaulted on mortgage loans until Dec 31., 2020.

Stock Market Research

(Reporting by Sandor Peto; editing by Patrick Graham)

FACTBOX-Hungarian PM unveils economic plan